USD/JPY breaks through the 154 integer level, the Senate pushes for a shutdown agreement, sparking buying interest

The key move by the U.S. Senate has become the main driver behind the recent rise in USD/JPY. During Wednesday’s Asian session, this currency pair maintained strength around 154.10, with market optimism about Washington’s policy resolution providing sustained momentum for the dollar.

Senate Agreement Creates Upward Momentum for the Dollar

According to Bloomberg, a U.S. government shutdown is expected to be resolved quickly this week. A temporary funding bill pushed through by eight moderate Senate Democrats has been approved, keeping federal operations running until January 30. This political development translated into a clear bullish signal for the dollar in the forex market.

As the market remains optimistic about the government reopening, the dollar against the yen has gained short-term support. Investors tend to reallocate risk exposure when uncertainty diminishes, and a strong dollar typically reflects increased risk appetite.

Employment Data Weighs on Further Gains

Despite positive political news, labor market data has cast a shadow. The Automatic Data Processing (ADP) report released on Tuesday showed that, over the four weeks ending October 25, the U.S. private sector shed an average of 11,250 jobs per week. This indicates that the employment market in late October has noticeably weakened compared to early October.

The larger-than-expected job cuts have limited the dollar’s upside potential. While the Senate’s shutdown resolution provides some sentiment support, poor employment data serve as a reminder of the economic slowdown.

Yen Depreciation Expectations and Concerns Over Official Intervention

Japanese regulators’ concerns about the rapid decline of the yen are also noteworthy. Japanese Finance Minister Shunichi Suzuki warned last week that the government is closely monitoring yen movements with high alertness and hinted at possible market intervention. Such statements often suppress further yen depreciation and set a ceiling for USD/JPY.

The Federal Reserve officials are scheduled to speak Wednesday evening, with comments from Williams, Powell, Waller, and others serving as important references for the next phase of dollar direction.

In summary, USD/JPY has been temporarily supported by optimistic expectations of the Senate resolving the government shutdown, but weak employment data and official intervention fears in Japan set a ceiling for this currency pair’s rise. The key psychological level around 154.00 remains an important support and resistance zone.